The 2018 state solar policy changes you need to know

This article was originally published on the blog of Aurora Solar. An updated version reflecting more recent policy developments in 2018 can be found on the Aurora Blog.

The solar industry is always dynamic, and keeping track of the latest developments around the nation can be tricky. Although this year got off to a rocky start with the federal government’s decision in January to impose a 30% tariff on foreign-manufactured solar components, there have since been a plethora of state-level policy developments that paint a more positive picture for the industry.

Actions by California, Hawaii and New Jersey are especially noteworthy. The striking decision by California—the world’s fifth largest economy—to make solar standard for new homes will help normalize solar technologies and massively expand the solar market. Hawaii’s redesign of utility incentives provides a model for how utilities can benefit from solar growth. And New Jersey’s new solar and clean energy mandates bring it into the ranks of the states with the Top 3 most ambitious clean energy targets.

Not all of the state-level actions thus far in 2018 have been supportive of solar, however. In particular, rollbacks of net metering may dampen the solar markets in Michigan and Connecticut. Despite these setbacks, overall these changes show that many states recognize the value of solar and other renewable energies and are ready to take action.

The state-level solar policy developments to date in 2018 detailed in today’s article. States are color-coded based on whether recent policy changes are expected to have positive or negative impacts on the solar industry.

The good news

California

By far the biggest state policy update, in terms of impacts for the solar industry more broadly, comes out of California. On May 9, the California Energy Commission mandated that nearly all new homes have rooftop solar starting in 2020. The changes are part of the state’s newly approved 2019 Building Energy Code.

This announcement will spur further growth in the California solar market, which has installed more solar than any other state by a factor of five according to SEIA. It also will contribute to the state’s commitment to sourcing 50% of its electricity from renewables by 2030.

Colorado

Colorado became one of the first states to designate energy storage as a consumer right when Colorado Governor John Hickenlooper signed SB 18-009 into law in late March. The law states that residents should be able to install, use and interconnect energy storage systems without unnecessary restrictions or discriminatory rates. It calls upon the Colorado Public Utilities Commission to establish rules governing customer-sited energy storage.

Florida

In a notable development for the Florida solar market, the Public Service Commission issued a statement in late April declaring that residential solar leases are allowed in the state. Previously, solar leases were deemed “third-party electricity sales,” which are prohibited in Florida.

Sunrun successfully argued to the commission that solar leases should be allowed because the payments are fixed and not contingent upon the amount of solar electricity the system produces. Florida solar customers now have a new financing option to choose from and solar companies in the state can offer a new product.

Hawaii

Hawaii is changing the revenue model for investor-owned electric utilities to better align their incentives with the growth of solar and energy storage. The measure, signed into law in April, is expected to aid the process of modernizing the state’s electricity grid because utility revenues will now be linked to performance metrics. The use of distributed energy resources like solar, rather than investment in costly new utility-owned infrastructure projects, will be incentivized.

This is big news. Utilities are a major player in the power sector, and their support or opposition is a major determining factor in solar market growth. Better aligning utility incentives with solar growth, as states like Hawaii and New York have endeavored to do, presents new opportunities for utilities to support the growth of renewable energy.

Additionally, in July, regulators ruled that existing solar customers in Hawaii who have net metering agreements (from prior to the state’s elimination of net metering in 2015), may now add energy storage systems without voiding the terms of their agreements.

The law also includes a 600-MW energy storage target and establishes a community solar pilot program for the state. It also establishes a planned phase-out of New Jersey’s SREC program in 2021, but calls on regulators to establish a successor program to support distributed New Jersey solar projects.

Utah

Two new policies with important implications for the Utah solar industry were signed into law by Utah Governor Gary Herbert in late March. One extends a $1,600 tax credit for residential Utah solar customers for an additional two years. The credit will begin to be phased out in 2021 over a period of three years. The other is a consumer protection measure that requires solar companies provide all residential customers with a disclosure statement to help ensure they understand the terms of their contracts. SEIA has applauded these developments.

These developments, particularly the tax credit, are welcome news for Utah’s solar industry, since recent data show a slowdown in its rooftop solar market, likely stemming from a 2017 change to the state’s net metering approach.

Not all of the state solar policy developments in 2018 to date have been positive, of course. In particular, Michigan and Connecticut dealt significant blows to their state solar markets. (For coverage of the negative solar policy developments, continue to the full version of this article on the Aurora Blog.) Nevertheless, it’s great to see that many states are recognizing the value of solar and working to make it more accessible. We’re excited to see what other pro-solar policies emerge in the remainder of 2018!

About The Author

Gwen Brown

Gwen Brown is content marketer at Aurora Solar, where she develops educational content for solar industry professionals including blogs, webinars and white papers. Prior to joining Aurora, Gwen was a Senior Research Associate at the Environmental Law Institute. She graduated Phi Beta Kappa from Gettysburg College, where she studied Environmental Studies and Political Science.